For Social Entrepreneurs, What Comes First: Business or Mission?

Entrepreneurs trying to both make money and benefit a social mission are often playing a game of chicken and egg. For some, the social cause rises above all else. For others, a successful business model comes first.

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Starting a business is hard. Starting a
business that attempts to solve large-scale social problems is
even harder.

But that hasn't stopped the most idealistic and ambitious
entrepreneurs from trying. In fact, over the last five years,
social entrepreneurship has increasingly
become the motivation behind startup business plans and a
point of consideration in corporate boardrooms. Whether
they're tackling world hunger, improving education or helping
people rent out the things they aren't using, companies of all
sizes are seeking ways to make positive change in the world.

As the social innovation movement has grown, so has the interplay
-- and in some cases tension -- between business model and
mission. Entrepreneurs trying to both make money and benefit a
social mission are often playing a game of chicken and egg,
having to decide which comes first: their social cause or their
bottom line.

Some social entrepreneurs, like GoldieBlox founder and CEO Debbie Sterling
have built their entire business with their mission front and
center -- literally. Sterling says there's a huge sign on the
wall of the company's office that says "The Mission is Greater
Than the Company," a reminder of the company's focus. "Every
few months or so, we check in and make sure that everyone
still feels that way, that we haven't become obsessed with
profitability, or cheapening things or lessening the quality,"
said Sterling at The Feast, a two-day social
entrepreneurship conference in New York City.

GoldieBlox, which makes toys intended to encourage girls to
pursue and enjoy engineering, has grown rapidly. It took less
than a year for Sterling's company to go from a Kickstarter
campaign to the shelves of Toys R Us. Since launching in
September of 2012, GoldieBlox has gone from a staff of one to a
staff of 13.

Throughout, Sterling has remained tied to her core mission.
"Every step of the way, we are all so passionate, we want to
remind ourselves what this is for. It is really about inspiring
girls and giving them more options and hopefully sparking that
interest that will eventually help them grow up and build our
world," she says.

Meanwhile, for some entrepreneurs, putting the mission before the
business is a backwards strategy for success. "Having the social
goal as No. 1 is inadequate and won't make you successful," said
Robin Chase, the founder and former CEO of car-rental company
Zipcar and the founder of peer-to-peer car
rental company Buzzcar. "It makes you focus on the wrong
thing because you have to deliver what people want," Chase
said.

When Chase first started Zipcar, the popular service which allows
consumers to rent cars by the hour or the day, she says she was
criticized for not making the company non-profit. Chase knew she
would need significant capital to get Zipcar off the ground and a
for-profit business model allowed her to take on investors and
raise capital.

Chase saw Zipcar as a business first and a social enterprise
second. While Zipcar gives consumers an alternative to owning a
car -- an inherently environmentally-friendly and therefore
classically social entrepreneurship type of endeavor – that's not
why people buy into the Zipcar model.

"Consumers, or collaborators, will buy a service because it
delivers to them what they need in their self-interest," says
Chase. In the case of Zipcar, consumers rent cars because it is
more convenient and cheaper than having to maintain a car.

To make positive social change on any meaningful scale, Chase
says social entrepreneurs need to first question whether there's
demand for what they are selling.

"In the venture capital community, they say: 'Will the dog eat
the dog food?' And so you are a startup and you are producing dog
food, and the question is, 'Will the dog eat the dog food?' If
you think about any social thing you are doing, if you are doing
it for purely social reasons, well, then the question is: 'Is the
dog interested?'"

"We started because we didn't even realize social innovation was
a term," said Jerri Chou, founder of The Feast, an annual
conference that attracts entrepreneurs and business leaders
committed to social change. Chou started the first Feast
conference in 2008 with her co-founders on credit card debt and
by inviting the people already in her address book. "There wasn't
a place for this," Chou said.

During the two-day conference, attendees break into small teams
to collaborate and come up with actionable plans to solve current
social problems. This year, those social issues included the
obesity epidemic in the U.S., U.S. veterans' affairs and the
rising popularity of technology-driven education. In previous
years, some of the solutions have extended beyond the walls of
the conference. For example, the "Fight Poverty Like a New
Yorker" campaign run by the poverty alleviation group, The Robin
Hood Foundation, was conceived at The Feast last year, says Chou.

For Chou and the other organizers of The Feast, social innovation
is a broad term, encompassing all business ventures that seek to
make the world better in some way. For example, Chou considers
businesses like accommodation-booking service AirBnB and vehicle-for-hire service
Uber social entrepreneurial ventures.
Rental companies included in the sharing economy enable
individuals to create wealth for themselves, solve problems
and simultaneously use excess capacity in the market, thereby
preventing demand for the manufacture of new goods.

While the sharing economy and peer-to-peer platforms are not yet
part of the common vernacular outside of the U.S., the concept of
social innovation appears to be catching the eye of the
international community. Starting in 2012, independently
organized Feast dinners were held in countries around the
world. The conversation around social innovation overseas
in 2013 "almost reminds me of New York in 2008," Chou says.

Not only is the adoption of social innovation spreading
geographically, but it's also gradually spreading into the titan
towers of capitalism. "Larger companies are starting to see the
benefit of thinking about not just profit, but about societal and
environmental value as well," says Chou.